BIR reset for protecting taxpayers’ rights

LET'S TALK TAX MIRASOL M. ABRENICA

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The foundation of any sovereign state rests on the ability to collect revenue, a principle often encapsulated in the legal maxim that “taxes are the lifeblood of the nation.”

This overarching authority stems from the state's inherent power of taxation, which exists even without an express provision in the Constitution. Precisely because the power is so encompassing, its execution by the taxing authority must be conducted with utmost care and integrity.

However, present clamor against ghost flood control projects that highlighted massive corruption in the bureaucracy led to complaints about the misconduct of taxing authorities. Under the scrutiny is the alleged weaponization of Letters of Authority (LoAs).

The LoA is the official document issued by the Commissioner of Internal Revenue (CIR) or their duly authorized representative that empowers specific revenue officers to examine and audit the books of account and other financial records of a taxpayer for a specific period.

Recognizing the urgent need to address systemic issues and protect taxpayer rights, the BIR, under the leadership of new Commissioner Charlito Martin R. Mendoza, suspended all audits to restore public trust by issuing Revenue Memorandum Circular (RMC) No. 107-2025.

SCOPE OF THE SUSPENSION

RMC No. 107-2025 ordered an immediate and indefinite suspension, beginning Nov. 24, of all ongoing field audits and related field operations by the BIR, including the issuance of LoAs and Mission Orders (MOs), examinations, and verification of taxpayers' books of account and other accounting records. During the suspension period, no LoAs and MOs shall be created, printed, signed, or served by the BIR to taxpayers.